2017 (5) TMI 1016 - AT - Central Excise

Penalty - SSI exemption availed wrongly though used Brand name of others - case of Revenue is that the appellant mis-represented and suppressed the facts and intentionally used brand name of other company, and did not pay the duty of Central Excise during the relevant period, the appellant cannot be given the benefit of non issue of SCN and non charging the penalty as provided under sub clause 2(B) of the then Section 11A of Central Excise Act, 1944 - Held that - this is a clear case where appellant did not bother to pay duty of Central Excise all along though the same was payable, when they were knowingly using brand name of other manufacturer - The appellant s argument that CBEC Circular No. 71/71/94-CX. allows use of brand name on the castings as a trade practice and also allows benefit of SSI exemption is of no consequence - It is on record that the Order-in-Original No. 46/2011 dated 18.3.2011 passed in this case gave the option to the appellant of reduced penalty of 25% as per the proviso to Section 11AC of Central Excise Act, 1944. However, the appellant did not make use of the said option which was statutorily available as per the provisions of Section 11AC ibid - penalty upheld - Appeal dismissed - decided against appellant.

Summary

Issues:
1. Appeal against penalty under Section 11AC of Central Excise Act, 1944 for misrepresentation and suppression of facts related to claiming SSI benefit using a brand name of another company.

Analysis:

Issue 1: Appeal against Penalty under Section 11AC
The appellant, a manufacturer of printing press washing chemicals, appealed against the penalty imposed under Section 11AC of the Central Excise Act, 1944, for wrongly claiming SSI benefit by using the brand name of a multinational company. The appellant contended that since they paid duty along with interest before the issuance of the Show Cause Notice, no penalty should be imposed. On the contrary, the Revenue argued that there was intentional misrepresentation and suppression of facts by the appellant, disqualifying them from the benefit of non-issuance of show cause notice and penalty waiver. The Commissioner (Appeals) noted an intent to evade duty due to willful misstatement and suppression of facts by the appellant.

Analysis:
Upon hearing both parties, the appellant's counsel argued that they believed duty was not payable as they used another company's brand name, citing Circular No. 71/71/94-CX to support their claim. The Revenue's counsel contended that there was clear suppression of facts, leading to an intent to evade duty. The Tribunal found that the appellant knowingly avoided paying Central Excise duty while using another manufacturer's brand name. The Circular cited by the appellant was deemed inapplicable to the case at hand. Despite being offered a reduced penalty option, the appellant did not utilize it, as statutorily available under Section 11AC. Citing legal precedents, including the Supreme Court's decisions, the Tribunal concluded that there was misstatement and suppression of facts by the appellant with the intent to evade duty, dismissing the appeal for lack of merit.

Conclusion:
Ultimately, the Tribunal upheld the impugned order, sustaining the penalty imposed under Section 11AC of the Central Excise Act, 1944, and dismissed the appeal. The judgment highlighted the appellant's failure to pay Central Excise duty despite using another company's brand name, leading to intentional evasion of duty through misrepresentation and suppression of facts.